View more on these topics

House prices rise for fourth consecutive month

Nationwide has revealed that the year-on-year house price fall has reduced to 2.7 per cent as UK homes rise in value for the fourth month in a row.

In its latest house price index survey, the building society found house prices rose by 1.6 per cent in August, slowing the year-on-year decline from -6.2 per cent to -2.7 per cent. The average house price now sits at £160,224.

Nationwide chief economist Martin Gahbauer says the three-month on three- month rate of change rose from 2.7 per cent in July to 3.3 per cent in August, the highest level since February 2007.

He says: “The exceptionally low level of interest rates offers some explanation for why house prices have not repeated the very sharp falls of 2008. Mortgage payments for existing homeowners have been reduced substantially – before the Monetary Policy Committee began cutting rates, the average interest and principal payment per mortgage holder represented about 38 per cent of the average income. Following the steep cuts in base rate, this has fallen to just 28 per cent.

“As a result, fewer homeowners are under immediate financial pressure to sell than might have been expected in a recessionary economic background with rising unemployment.”

Moneysprite director,Ashley Brown says: “We are correct to be cautious about the recovery, but we shouldn’t be overly negative about positive news. A point missed by most economists is that banks now have such high margins on mortgage lending that there is plenty of room for manoeuvre when interest rates do start to rise.”

Email Mortgages chief executive Michael White says: “This reflects the improved sentiment continuing to support the market. We have now seen house price increases reported by the Nationwide throughout the summer months, however this is still based on a period of historically low transactional volumes.  The market continues to see regular optimistic reports from the estate agent fraternity regarding improved sales figures although the lack of mortgage availability still poses a serious threat to the improving market conditions.”

Recommended

Why Aifa breaks out of the UK bubble to take role in Europe

When explaining the work of Aifa, I am often asked about our European efforts. Our work with the FSA, Treasury, Department for Work and Pensions and the main political parties is largely self-explanatory but the reason for our European engagement seems to be a little less clear.

Thumbnail

Case study: administration — implementing a management log

Our client is a leading video game and publishing company best known for its console role-playing game franchises. The client provides a number of benefits, at varying levels and cost that attract a P11d liability. With the absence of a management log to track data for benefit movements, enormous administrative and therefore cost implications were occurring each year just to comply with P11d reporting requirements.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com